Obamacare, other economic concerns could delay new Harford hospital project

Upper Chesapeake CEO speaks to Havre de Grace Chamber

Hafiz Rashid for The Aegis

Upper Chesapeake Health President and CEO Lyle Sheldon takes questions during an appearance before the Havre de Grace Chamber of Commerce Tursday. Sheldon said development of the planned new Havre de Grace Hospital may be pushed until the full impact from federal health care mandates can be...

Upper Chesapeake Health President and CEO Lyle Sheldon takes questions during an appearance before the Havre de Grace Chamber of Commerce Tursday. Sheldon said development of the planned new Havre de Grace Hospital may be pushed until the full impact from federal health care mandates can be... (Hafiz Rashid for The Aegis)

Development of new hospital planned by I-95 in Havre de Grace could be pushed farther into the future because of the uncertainty over federal health care mandates, the hospital company's chief executive said Thursday.

Lyle Sheldon, president and CEO of Upper Chesapeake Health, told members of the Havre de Grace Chamber of Commerce the timing of the hospital's development will be influenced by such issues as federal insurance reimbursement rates and whether state regulatory officials determine the project is economically viable.

Sheldon spoke to chamber members, who met at the Bayou Restaurant, about plans for the 97-acre property his company owns along Bulle Rock Parkway near of I-95, Route 155 and Bulle Rock Parkway, as well as about the progress made on a new cancer facility at Upper Chesapeake's Bel Air campus.

Upper Chesapeake, which is part of the University of Maryland Medical System, owns Harford Memorial Hospital in downtown Havre de Grace, which it plans to replace with a new, 85- to 120-bed hospital at the Bulle Rock Parkway property, along with medical offices, retail and a hotel.

"We've been putting together a master site plan of actually looking at development up there on the hill," Sheldon said, adding "it's a two-fold process."

"On one hand there are issues that we have to deal with locally here: access to water; access to sewer; getting the proper zoning; a number of things like that," Sheldon said. "The city of Havre de Grace has been very cooperative as we've gone through that process."

"The second piece of this though was getting approval from the state, and that's approval not only for what we want to build, but also what the affordability of that is," Sheldon continued, adding that economic factors, such as the change in real estate values and the recession in the last 3-5 years, as well as Obamacare, have had a significant impact on affordability.

"From a health care perspective, if you followed any of the conversation our President has had, President Obama, you recognize that his legislation with Obamacare really focuses on how much health care may change, and how reimbursement may change, and whether that's from a physician's standpoint; whether that's from a hospital's standpoint," Sheldon said.

"But, the climate as far when we might want to do something on the hill is really predicated on when we get some clarity on how we see reimbursement change on both the state and federal level, and I'm not sure if that's a year from now, not sure if that's three years from now," he added.

"But what we wanted to do was take that part of the process that was locally driven and go through that as we have done, so that when we do have clarity on what we want to build, when we have clarity on what reimbursement might look like, then we'll be in a position to go ahead and file an application with the state and move that project forward," Sheldon said.

Sheldon said that conversations with federal and state governments are ongoing to see how the methodology for reimbursement is going to change.

"Those are some of the uncertainties that we are wrestling with right now that are really dictating some of the time with what we may do up here on [Bulle Rock] hill," Sheldon said. "So as we get clarity around that, obviously we'll keep you well informed because your input and your perspective on what we do are critically important for us."

Last year, Upper Chesapeake submitted a site concept plan for the new hospital site to the Havre de Grace Planning Commission. Both the commission and Upper Chesapeake held several community meetings on the plan, which is still under study by city planning officials. Havre de Grace city elected officials are receptive to the new hospital proposal but have also said they want to see what the company plans to do with the Harford Memorial property once that hospital closes.

Cancer center update

Sheldon also spoke about the progress being made on the construction of The Patricia D. and M. Scot Kaufman Cancer Center at Upper Chesapeake's Bel Air campus, noting that need for such a center is high, with Harford County having the third largest incidence of cancer in the state, and Cecil County having the fourth highest.

"Over 1,250 new cancer diagnoses take place in Harford County patients every year," Sheldon added.

Construction on the center began in Fall 2011. "Today we're actually about seven months away from that being completed," he said, which would be sometime this October.

"It's a $60 million project, and $37 million of that is construction," Sheldon said. "Twenty-five percent of the construction spent is Harford County-based contractors. So, we've been very deliberate in making sure that we move in that direction."

Sheldon noted that Upper Chesapeake Health set a goal to fund-raise $17.5 million from the community last fall and has already received 1,600 gifts.

"Over the last year, we've really been impressed by the generosity of this community," Sheldon said. He added that the Harford Memorial Hospital Ladies Axillary had already pledged $250,000, and volunteers at Upper Chesapeake had pledged $750,000. On Feb. 1, Harford United Charities donated $50,000 toward the cancer center, raised at the organization's annual gala.

"I'm proud to say again, with the support of so many of you here, that you've been able to help us raise money and help us be in a position that in the fall of this year we'll be open that facility," Sheldon said.